An office supply store open 5 days a week must determine the best inventory policy for boxes of copier paper. Weekly demand is nearly constant at 250 boxes and when orders are placed, then entire shipment arrives at once. The cost per box is $22 and the inventory holding cost is 28%. Orders are placed at a cost of $40 each; including preparation time and communication charges, and the lead time is 2 days.
a. Find the optimal order quantity.
b. What is the reorder point?
c. How often should an order be placed?